Bitcoin vs bitcoin
To understand Bitcoin you have to break it down to its to two components. Firstly, there is the Bitcoin protocol (with a big B). This is a piece of open-source software that anyone with a computer and access to the internet can download.
The Bitcoin source code - aka Bitcoin Core - is maintained and improved by a group of developers. You don’t have to run the software to own the currency, but it is worthwhile understanding the process that ensures the balance of bitcoin you own is accurate.
By running the Bitcoin protocol you are joining a network of other computers (nodes) around the world running the same software that is a system for maintaining a ledger of transactions called the Blockchain. The Blockchain is literally a digital chain of blocks of debits and credits of the digital currency, bitcoin, with a small b. New blocks get added to chain as the nodes validate new transactions.
The magic of bitcoin mining
What is so revolutionary about Bitcoin is that it can maintain an accurate and immutable (unchangeable) record of the sending and spending of bitcoin without a central authority. The nodes replaces the roll that banks currently provide creating a consensus on accuracy and regulation of supply through an incredibly clever use of cryptography, incentive and Proof of Work, called bitcoin mining (read about that process in our article on bitcoin transaction fees).
The mining process regulates the rate at which new bitcoin are released working towards a fixed supply of 21 million BTC. So it has both utility, as it can be used as medium of exchange, and works as a store of value, because as utility grows more people want it, but with supply fixed, increasing demand pushes its value ever higher.
When you use your debit or credit card online or in a shop do you understand the processes behind the transaction? Probably not; what is important is that you trust it.
Cryptography, mining, no central issuer, no physical coins or notes - Bitcoin is so different from traditional ideas of money. And given the fact that no one knows who its creator, Satoshi Nakomoto, is it should be no surprise that the average person in the street is intimidated, but the unfamiliarity of ideas shouldn’t be a reason to dismiss it.
When you use your debit or credit card online or in a shop do you understand the processes behind the transaction? Probably not; what is important is that you trust it, and once you start using and appreciating the benefits of bitcoin, you’ll trust it in the same way and realise its potential, especially for gambling. Here is a summary of the main benefits:
As already mentioned, bitcoin is entirely independent of the established financial system which functions by charging for services such as transfer of your money. Unless you want to directly connect your bank account to a betting account you are going to be hit with charges which will vary depending on the approach taken. One of the key advantages of bitcoin (or bitcoin cash - also supported by Cloudbet) is that transferring it is very inexpensive by comparison. You pay fees which incentivise the Miners to maintain the blockchain, but they compare favourably with the payment methods offered by traditional sportsbooks.
Fast & Transparent
Not only is it cheap to transfer bitcoin, it is also relatively fast compared to many of the standard payment methods offered by traditional bookmakers. In general a transaction will take around twenty minutes, depending on how busy the Bitcoin network is, but the beauty of the system is that you have full access to your withdrawal transaction - by simply exploring the Bitcoin blockchain - providing complete transparency. Imagining asking a regular bookmaker to allow you to have open access to their payment system to view the status of a withdrawal?
By opening an account with any sportsbook you are starting a relationship which requires trust because you are sharing personal information; this understandably makes many people uncomfortable. Perhaps, one of the main reasons why bitcoin is so perfect for gambling is that it cuts down on the amount of personal information that needs to be shared. To fund a bitcoin betting account you just need a bitcoin wallet address which is a string of code that is untraceable to you.
One of the most elegant characteristics of Bitcoin is that its units cannot be spent twice, nor can they be counterfeited - a major drawback with physical money. The only way you can lose your bitcoin is if you no longer have access to your bitcoin wallet or its private key. Cloudbet is fully focused on security, which is why we offer two factor authentication as standard for all customers as an added layer of security. Because by using bitcoin you are your own bank, it is worth learning about bitcoin wallets, the tools for spending and sending BTC.
It is hard in just a few hundred words to explain the beauty of Bitcoin. One of the best ways to understand it is to simply start using it. Download a free bitcoin wallet - blockchain.info is a good place to start - buy some bitcoin (we have written an article specifically explaining how to buy bitcoin) and start using it. It is simple to create a Cloudbet account and send bitcoin to our wallet to start gambling on sports or casino. Join the revolution and you’ll soon see that gambling with bitcoin is the future.